Latest Weekly US Macro Data Overview (Covering Data Released from May 9 to May 15, 2025)
Happy Weekend!
1. Price Side: Inflation Pressure Continues to Moderate
| Indicator | Latest Value | MoM | YoY | Key Breakdown | Highlights |
|---|---|---|---|---|---|
| CPI (April) | ▲ 0.2 % m/m | +0.3 pct | 2.3 % y/y | - Food -0.1 % - Energy +0.7 % - Core (ex-food & energy) +0.2 % | CPI YoY hits lowest since 2021; shelter (+0.3 %) still contributes over half, but used cars & airfares drag (Bureau of Labor Statistics) |
| PPI (April) | ▼ 0.5 % m/m | -0.5 pct | 2.4 % y/y | Services -0.7 % (record monthly drop); Core PPI (ex-food & trade) -0.1 % | Downstream wholesale margins shrink, signaling weaker pricing power—downward pressure on future CPI (Bureau of Labor Statistics) |
Quick Interpretation:
Both CPI and core CPI below 3%, coupled with PPI plunge, confirm inventory destocking + softening service demand logic.
Market wary of "tariff shock 2.0", but April data shows no clear pressure. Fed officials generally "cautiously optimistic".
2. Demand Side: Consumer Spending Momentum Slows Sharply
| Indicator | Latest Value | MoM | Core Control Group * | Highlights |
|---|---|---|---|---|
| Retail Sales (April) | +0.1 % | Prior +1.7 % | -0.2 % | Auto pre-purchases face high base effect; furniture & sporting goods lead declines (Reuters) |
* Core control group = retail sales ex-autos, gas, building materials & dining—better aligns with GDP goods consumption.
Quick Interpretation: Weak goods consumption echoes CPI "goods price retreat"; with services yet to fully reflect, Q2 GDP contribution looks cautious.
3. Labor Market: Resilient but Softening at the Margin
| Indicator | Latest Value | 4-Week Avg | Continued Claims | Highlights |
|---|---|---|---|---|
| Initial Jobless Claims (May 10) | 229,000 | 230,500 | 1.881 mn | Initial claims hover in 20k–24k range for 10 weeks (low layoffs); rising continued claims signal longer re-employment cycles (Reuters) |
Quick Interpretation: Labor demand cools but doesn’t "crash"; easing wage pressures create room for service CPI to decline further.
4. Real Estate & Investment: Key Data Due This Weekend
April Housing Starts & Permits (May 16 release) expected to rebound slightly MoM, but high rates + tariff-driven material costs remain headwinds (Census.gov).
Fed Updates & Market Pricing
1. Key Official Remarks (Chronological)
| Date | Official | Key Takeaways |
|---|---|---|
| May 14 | Vice Chair Jefferson | Tariffs may boost H2 2025 inflation while dragging growth—stay "data-dependent"; reiterates "still far" from inflation target (Bloomberg) |
| May 14 | SF Fed’s Daly | Economy "solid", inflation falling, "policy well-positioned to wait" (Bloomberg) |
| May 15 | Chair Powell | 2020 "average inflation targeting" under review; future policy may need more flexibility against supply shocks (Federal Reserve, Reuters) |
| May 14–15 | Waller, Kugler, Barr et al. | All emphasize "study and wait", no short-term action hints (Federal Reserve, Federal Reserve) |
Consensus: "Patience and watchfulness" dominate; core CPI drop welcomed but tariffs flagged—holding rates + awaiting data remains baseline.
2. Wall Street Rate Expectations
CME FedWatch (May 15 close): July cut odds drop from 65% to 48%; first cut now priced for September.
Short-term yields dip ~9bps post-CPI; weak retail sales further flattens curve.
Drivers:
Core CPI <3% → reinforces 2024 cut thesis
Tariffs/election noise → traders trim cut magnitude bets (WSJ)
Synthesis & Outlook
| Dimension | Current Assessment | Forward Focus |
|---|---|---|
| Inflation | CPI & core CPI at 2.3/2.8%; PPI negative MoM—near-term pressures ease | June 11 May CPI: <2% would be key confirmation |
| Consumption | Post-tariff pull-forward + "high base + real slowdown"; control group negative | Can summer services (travel/leisure) offset goods weakness? |
| Labor | Initial claims low; soft-landing signs | June nonfarm: >150k = healthy; avg hourly earnings <0.3% MoM |
| Policy | Fed shifts from "waiting to cool" to "waiting to confirm"; framework review | June FOMC dots: 2025 terminal rate path revisions? |
| Risks | - Tariff volatility - Geopolitical supply shocks - Earnings downgrades | High-frequency prices (freight/agri), surveys (ISM/PMI price components) |
Bottom Line
Data: April core inflation + producer prices show "further cooling"; retail sales + jobless claims reflect slowing but not collapsing demand—a **"soft descent"** macro mix.
Policy: Fed stays patient but begins 2020 framework review; tariff warnings suggest no rush to cut.
Markets: Rate futures delay first-cut bets; curve shifts down—bonds & USD hyper-sensitive to "cooling inflation + softening growth".
Next:
May CPI & PCE - June FOMC statement/dots - Early Q2 earnings guidance (consumer slowdown confirmation)
In sum: Slower inflation provides "necessary but not sufficient" conditions for easing—both Fed and Street await more data to confirm "inflation keeps falling without growth crash".
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